Ouch: U.S. Producer Prices Up, Industrial Production Down
A bit of an economic conundrum confronts the U.S. economy as the latest data shows that producer prices are up while industrial production is down. Ouch.
Let’s go to the numbers: U.S. producer prices rose for a second straight month in May as the cost of energy products and services increased, but a strong dollar and lower energy prices will likely keep inflation at bay for a while.
The Labor Department said its producer price index for final demand increased 0.4 percent last month after rising 0.2 percent in April. In the 12 months through May, the PPI slipped 0.1 percent after being unchanged in April.
Economists p had forecast the PPI gaining 0.3 percent last month and slipping 0.1 percent from a year ago.
At the same time, U.S. industrial production fell more than expected in May on a decline in utilities output and auto manufacturing. The data, provided by the Federal Reserve, suggests that the economy may be losing some steam in the second quarter.
Industrial output declined 0.4 percent last month after a downward revised 0.6 percent increase in April. Economists had forecast industrial production slipping 0.2 percent last month.
The industrial sector measured by the U.S. central bank comprises manufacturing, mining, and electric and gas utilities.
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